| (Mark      One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| [      X ] Quarterly Report Pursuant to Section 13 or 15(d) of the      Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| for      the quarterly period ended March 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| [      ]Transition Report Pursuant to Section 13 or 15(d) of the      Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| for      the transition period      from                                                            to                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| Commission      File Number 000-50266                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |

| New      Mexico                                       |   | 85-0242376                                   |
|-------------------------------------------------------|--------|----------------------------------------------|
| (State      of incorporation)                         |   | (I.R.S.      Employer Identification Number) |
|                                                  |   |                                         |
| 1200      Trinity Drive, Los Alamos, New Mexico 87544 |
| (Address      of principal executive offices)         |
|                                                  |   |                                         |
| (505) 662-5171                                   |
| Telephone      number                                 |

----

| Large      Accelerated Filer  [ ] | Accelerated      Filer  [ X ] |   |
|---------------------------------------------|-----------------------------------------|--------|
| Non-Accelerated      Filer  [ ]   | Smaller      Reporting Company[ ]       |   |

----

| PART      I. FINANCIAL INFORMATION |
|------------------------------------|
|                               |   |
| Item      1.                       | Financial      Statements |
|                               |   |
| Item      2.                       | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations |
|                               |   |
| Item      3.                       | Quantitative      and Qualitative Disclosures About Market Risk |
|                               |   |
| Item      4.                       | Controls      and Procedures |
|                               |   |
| PART      II. OTHER INFORMATION    |
|                               |   |
| Item      1.                       | Legal      Proceedings |
|                               |   |
| Item      1A.                      | Risk      Factors |
|                               |   |
| Item      2.                       | Unregistered      Sales of Equity Securities and Use of Proceeds |
|                               |   |
| Item      3.                       | Defaults      Upon Senior Securities |
|                               |   |
| Item      4.                       | Removed      and Reserved |
|                               |   |
| Item      5.                       | Other      Information |
|                               |   |
| Item      6.                       | Exhibits |
|                               |   |
|                               | SIGNATURES |
|                               |   |
|                               | CERTIFICATIONS |

----

|                                                                                                                                                           |   | March      31, 2010 |      |   | December      31,2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-----------------------|--------|
|                                                                                                                                                           |   | (Unaudited)         |      |   |                  |   |
| ASSETS                                                                                                                                                         |   |                |      |   |                  |   |
| Cash      and due from banks                                                                                                                                   |   | $                   | 20,275    |   |                  | $      | 18,761 |   |
| Interest-bearing      deposits with banks                                                                                                                      |   |                | 143,709   |   |                  |   | 188,114 |   |
| Federal      funds sold and securities purchased under resell      agreements                                                                                  |   |                | 403       |   |                  |   | 620 |   |
|     Cash      and cash equivalents                                                                                                         |   |                | 164,387   |   |                  |   | 207,495 |   |
| Investment      securities available for sale                                                                                                                  |   |                | 124,231   |   |                  |   | 136,756 |   |
| Investment      securities held to maturity, at amortized cost (fair value of $10,792 at      March 31, 2010 and $10,808 at  December 31,      2009) |   |                | 11,353    |   |                  |   | 11,436 |   |
| Other      investments                                                                                                                                         |   |                | 9,336     |   |                  |   | 9,568 |   |
| Loans      (net of allowance for loan losses of $24,822 at March 31, 2010 and $24,504      at December 31, 2009)                                               |   |                | 1,196,698 |   |                  |   | 1,215,282 |   |
| Loans      held for sale                                                                                                                                       |   |                | 7,893     |   |                  |   | 9,245 |   |
| Premises      and equipment, net                                                                                                                               |   |                | 31,401    |   |                  |   | 31,949 |   |
| Leased      property under capital leases, net                                                                                                                 |   |                | 2,211     |   |                  |   | 2,211 |   |
| Accrued      interest receivable                                                                                                                               |   |                | 6,871     |   |                  |   | 6,840 |   |
| Mortgage      servicing rights, net                                                                                                                            |   |                | 7,645     |   |                  |   | 7,647 |   |
| Other      intangible assets                                                                                                                                   |   |                | 705       |   |                  |   | 830 |   |
| Other      real estate owned                                                                                                                                   |   |                | 20,025    |   |                  |   | 16,750 |   |
| Prepaid      expenses                                                                                                                                          |   |                | 8,003     |   |                  |   | 8,648 |   |
| Net      deferred tax assets                                                                                                                                   |   |                | 5,074     |   |                  |   | 4,979 |   |
| Other      assets                                                                                                                                              |   |                | 7,292     |   |                  |   | 7,105 |   |
|     Total      assets                                                                                                                      |   | $                   | 1,603,125 |   |                  | $      | 1,676,741 |   |

----

|                                                                                                                                                                                                         |   | March      31, 2010 |      |   | December      31, 2009 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-----------------------------|--------|
|                                                                                                                                                                                                         |   |                |      |   |                        |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                    |   |                |      |   |                        |   |   |   |
| Liabilities                                                                                                                                                                                                  |   |                |      |   |                        |   |   |   |
|     Deposits:                                                                                                                                                                            |   |                |      |   |                        |   |   |   |
|         Noninterest-bearing                                                                                                                                          |   | $                   | 90,234    |   |                        | $      | 87,238 |   |
|         Interest-bearing                                                                                                                                             |   |                | 1,307,219 |   |                        |   | 1,381,207 |   |
|             Total      deposits                                                                                                                  |   |                | 1,397,453 |   |                        |   | 1,468,445 |   |
|     Short-term      borrowings                                                                                                                                                           |   |                | 1,183     |   |                        |   | 20,000 |   |
|     Long-term      borrowings                                                                                                                                                            |   |                | 32,300    |   |                        |   | 13,493 |   |
|     Long-term      capital lease obligations                                                                                                                                             |   |                | 2,211     |   |                        |   | 2,211 |   |
|     Junior      subordinated debt owed to unconsolidated trusts                                                                                                                          |   |                | 37,116    |   |                        |   | 37,116 |   |
|     Accrued      interest payable                                                                                                                                                        |   |                | 4,514     |   |                        |   | 5,038 |   |
|     Other      liabilities                                                                                                                                                               |   |                | 5,734     |   |                        |   | 7,536 |   |
|             Total      liabilities                                                                                                               |   |                | 1,480,511 |   |                        |   | 1,553,839 |   |
|                                                                                                                                                                                                         |   |                |      |   |                        |   |   |   |
| Stock      owned by Employee Stock Ownership Plan (ESOP) participants; 627,030 shares      at March 31, 2010 and December 31, 2009, at fair    value                                                         |   |                | 11,192    |   |                        |   | 12,541 |   |
| Commitments      and contingencies (Note 13)                                                                                                                                                                 |   |                |      |   |                        |   |   |   |
| Stockholders'      equity                                                                                                                                                                                    |   |                |      |   |                        |   |   |   |
| Preferred      stock, no par, authorized 1,000,000 shares                                                                                                                                                    |   |                |      |   |                        |   |   |   |
|      Series      A, 5% cumulative perpetual, 35,539 shares issued and outstanding at March      31, 2010 and December 31, 2009, $1,000.00 liquidation value, at amortized      cost |   |                | 33,650    |   |                        |   | 33,597 |   |
|      Series      B, 9% cumulative perpetual, 1,777 shares issued and outstanding at March      31, 2010 and December 31, 2009, $1,000.00 liquidation value, at amortized      cost  |   |                | 2,069     |   |                        |   | 2,077 |   |
|     Common      stock, no par, authorized 20,000,000 shares; issued 6,856,800 shares,      outstanding 6,440,784 shares at March 31, 2010 and December 31,      2009                     |   |                | 6,836     |   |                        |   | 6,836 |   |
|     Additional      paid-in capital                                                                                                                                                      |   |                | 1,905     |   |                        |   | 1,869 |   |
|     Retained      earnings                                                                                                                                                               |   |                | 78,308    |   |                        |   | 77,054 |   |
|     Accumulated      other comprehensive (loss) income                                                                                                                                   |   |                | (132      | )      |                        |   | 142 |   |
|             Total      stockholders' equity before treasury stock                                                                                |   |                | 122,636   |   |                        |   | 121,575 |   |
| Treasury      stock, at cost, 416,016 shares at March 31, 2010 and December 31,      2009                                                                                                                    |   |                | (11,214   | )      |                        |   | (11,214 | ) |
|             Total      stockholders' equity                                                                                                      |   |                | 111,422   |   |                        |   | 110,361 |   |
|             Total      liabilities and stockholders' equity                                                                                      |   | $                   | 1,603,125 |   |                        | $      | 1,676,741 |   |

----

|                                                        |   | Three      Months Ended March 31, |   |
|-------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                        |   | 2010                              |   |   | 2009 |   |
| Interest      income:                                       |   |                              |   |   |   |   |
| Loans,      including fees                                  |   | $                                 | 17,272 |   |   | $ | 18,992 |   |
| Investment      securities:                                 |   |                              |   |   |   |   |   |   |
| Taxable                                                     |   |                              | 633    |   |   |   | 198 |   |
| Nontaxable                                                  |   |                              | 298    |   |   |   | 217 |   |
| Federal      funds sold                                     |   |                              | -      |   |   |   | 1 |   |
| Other      interest-bearing deposits                        |   |                              | 105    |   |   |   | 9 |   |
| Investment      in unconsolidated trusts                    |   |                              | 20     |   |   |   | 21 |   |
| Total      interest income                                  |   |                              | 18,328 |   |   |   | 19,438 |   |
| Interest      expense:                                      |   |                              |   |   |   |   |   |   |
| Deposits                                                    |   |                              | 3,963  |   |   |   | 4,916 |   |
| Short-term      borrowings                                  |   |                              | 216    |   |   |   | 63 |   |
| Long-term      borrowings                                   |   |                              | 128    |   |   |   | 311 |   |
| Long-term      capital lease obligations                    |   |                              | 67     |   |   |   | 67 |   |
| Junior      subordinated debt owed to unconsolidated trusts |   |                              | 683    |   |   |   | 709 |   |
| Total      interest expense                                 |   |                              | 5,057  |   |   |   | 6,066 |   |
| Net      interest income                                    |   |                              | 13,271 |   |   |   | 13,372 |   |
| Provision      for loan losses                              |   |                              | 4,257  |   |   |   | 4,161 |   |
| Net      interest income after provision for loan losses    |   |                              | 9,014  |   |   |   | 9,211 |   |
| Other      income:                                          |   |                              |   |   |   |   |   |   |
| Mortgage      loan servicing fees                           |   |                              | 646    |   |   |   | 787 |   |
| Trust      fees                                             |   |                              | 355    |   |   |   | 376 |   |
| Loan      and other fees                                    |   |                              | 666    |   |   |   | 613 |   |
| Service      charges on deposits                            |   |                              | 408    |   |   |   | 407 |   |
| Gain      on sale of loans                                  |   |                              | 720    |   |   |   | 3,069 |   |
| Gain      on sale of securities                             |   |                              | 47     |   |   |   | 698 |   |
| Title      insurance premiums                               |   |                              | 188    |   |   |   | 441 |   |
| Other      operating income                                 |   |                              | 26     |   |   |   | 103 |   |
| Total      other income                                     |   |                              | 3,056  |   |   |   | 6,494 |   |

----

|                                                         |   | Three      months ended March 31, |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                         |   |                              | 2010   |   |   | 2009 |   |
| Other      expenses:                                         |   |                              |   |   |   |   |   |   |
| Salaries      and employee benefits                          |   | $                                 | 5,078  |   |   | $ | 5,044 |   |
| Occupancy                                                    |   |                              | 977    |   |   |   | 824 |   |
| Data      processing                                         |   |                              | 724    |   |   |   | 631 |   |
| Marketing                                                    |   |                              | 356    |   |   |   | 448 |   |
| Amortization      and valuation of mortgage servicing rights |   |                              | 309    |   |   |   | 986 |   |
| Amortization      and valuation of other intangible assets   |   |                              | 125    |   |   |   | 123 |   |
| Supplies                                                     |   |                              | 91     |   |   |   | 186 |   |
| Loss      on sale of other real estate owned                 |   |                              | 432    |   |   |   | 218 |   |
| Postage                                                      |   |                              | 161    |   |   |   | 167 |   |
| Bankcard      and ATM network fees                           |   |                              | 163    |   |   |   | 330 |   |
| Legal,      professional and accounting fees                 |   |                              | 753    |   |   |   | 368 |   |
| FDIC      insurance premiums                                 |   |                              | 898    |   |   |   | 247 |   |
| Collection      expenses                                     |   |                              | 380    |   |   |   | 122 |   |
| Other                                                        |   |                              | 538    |   |   |   | 795 |   |
| Total      other expense                                     |   |                              | 10,985 |   |   |   | 10,489 |   |
| Income      before provision for income taxes                |   |                              | 1,085  |   |   |   | 5,216 |   |
| Provision      for income taxes                              |   |                              | 649    |   |   |   | 1,985 |   |
| Net      income                                              |   | $                                 | 436    |   |   | $ | 3,231 |   |
| Dividends      and discount accretion on preferred shares    |   |                              | 529    |   |   |   | 23 |   |
| Net      (loss) income available to common shareholders      |   | $                                 | (93    | ) |   | $ | 3,208 |   |
| Basic      earnings (loss) per common share                  |   | $                                 | (0.01  | ) |   | $ | 0.50 |   |
| Diluted      earnings (loss) per common share                |   | $                                 | (0.01  | ) |   | $ | 0.50 |   |

----

|                                                                                                  |   | Three      Months Ended March 31, |    |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                                                  |   | 2010                              |    |   | 2009 |   |
| Cash      Flows From Operating Activities                                                             |   |                              |    |   |   |   |
| Net      income                                                                                       |   | $                                 | 436     |   |   | $ | 3,231 |   |
| Adjustments      to reconcile net income to net cash provided by (used in) operating      activities: |   |
| Depreciation      and amortization                                                                    |   |                              | 778     |   |   |   | 604 |   |
| Net      amortization of:                                                                             |   |                              |    |   |   |   |   |   |
| Mortgage      servicing rights                                                                        |   |                              | 502     |   |   |   | 642 |   |
| Other      intangible assets                                                                          |   |                              | 125     |   |   |   | 67 |   |
| Premium      and discounts on investment securities, net                                              |   |                              | 118     |   |   |   | 127 |   |
| Junior      subordinated debt owed to unconsolidated trusts issuance      costs                       |   |                              | 3       |   |   |   | 3 |   |
| Provision      for loan losses                                                                        |   |                              | 4,257   |   |   |   | 4,161 |   |
| Change      in mortgage servicing rights valuation allowance                                          |   |                              | (193    | ) |   |   | 344 |   |
| Impairment      of other intangible assets valuation allowance                                        |   |                              | -       |   |   |   | 56 |   |
| Loss      on disposal of premises and equipment                                                       |   |                              | 9       |   |   |   | - |   |
| (Gain)      on sale of investment securities                                                          |   |                              | (47     | ) |   |   | (698 | ) |
| Federal      Home Loan Bank (FHLB) stock dividends received                                           |   |                              | (3      | ) |   |   | (2 | ) |
| Loss      on venture capital investments                                                              |   |                              | 90      |   |   |   | 273 |   |
| Gain      on sale of loans                                                                            |   |                              | (720    | ) |   |   | (3,069 | ) |
| Loss      on disposal of other real estate owned                                                      |   |                              | 103     |   |   |   | 71 |   |
| Write-down      of value of other real estate owned                                                   |   |                              | 339     |   |   |   | 150 |   |
| Decrease      in other assets                                                                         |   |                              | 449     |   |   |   | 1,196 |   |
| (Decrease)      increase in other liabilities                                                    |   |                              | (585    | ) |   |   | 1,108 |   |
| Stock      options and stock appreciation rights expenses                                             |   |                              | 36      |   |   |   | 37 |   |
| Net      cash provided by operating activities before originations and gross sales      of loans      |   |                              | 5,697   |   |   |   | 8,301 |   |
| Gross      sales of loans held for sale                                                               |   |                              | 30,695  |   |   |   | 145,648 |   |
| Origination      of loans held for sale                                                               |   |                              | (28,930 | ) |   |   | (165,587 | ) |
| Net      cash provided by (used in) operating activities                                         |   |                              | 7,462   |   |   |   | (11,638 | ) |

----

|                                                                                         |   | Three      Months Ended March 31, |    |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                                         |   | 2010                              |    |   | 2009 |   |
| Cash      Flows From Investing Activities                                                    |   |                              |    |   |   |   |
| Proceeds      from maturities and paydowns of investment securities, available for      sale |   | $                                 | 19,505  |   |   | $ | 486 |   |
| Proceeds      from maturities and paydowns of investment securities, held to      maturity   |   |                              | 83      |   |   |   | 67 |   |
| Proceeds      from maturities and paydowns of investment securities,      other              |   |                              | 171     |   |   |   | - |   |
| Proceeds      from sale of investment securities, available for    sale                      |   |                              | 3,422   |   |   |   | 42,082 |   |
| Purchase      of investment securities, available for sale                                   |   |                              | (10,867 | ) |   |   | (7,763 | ) |
| Purchase      of investment securities, other                                                |   |                              | (26     | ) |   |   | (1,242 | ) |
| Proceeds      from sale of other real estate owned                                           |   |                              | 1,698   |   |   |   | 711 |   |
| Loans      funded, net of repayments                                                         |   |                              | 8,912   |   |   |   | (1,350 | ) |
| Purchases      of premises and equipment                                                     |   |                              | (239    | ) |   |   | (2,496 | ) |
| Net      cash provided by investing activities                                               |   |                              | 22,659  |   |   |   | 30,495 |   |
| Cash      Flows From Financing Activities                                                    |   |                              |    |   |   |   |   |   |
| Net      (decrease) increase in demand deposits, NOW accounts and savings      accounts      |   |                              | (78,456 | ) |   |   | 3,984 |   |
| Net      increase in time deposits                                                           |   |                              | 7,464   |   |   |   | 39,758 |   |
| Proceeds      from issuances of borrowings                                                   |   |                              | 20,000  |   |   |   | 30,000 |   |
| Repayment      of borrowings                                                                 |   |                              | (20,010 | ) |   |   | (9 | ) |
| Issuance      of preferred stock                                                             |   |                              | -       |   |   |   | 35,539 |   |
| Common      shares dividend payments                                                         |   |                              | (1,739  | ) |   |   | (2,579 | ) |
| Preferred      shares dividend payments                                                      |   |                              | (488    | ) |   |   | - |   |
| Net      cash (used in) provided by financing      activities                      |   |                              | (73,229 | ) |   |   | 106,693 |   |
| Net      (decrease) increase in cash and cash equivalents                                    |   |                              | (43,108 | ) |   |   | 125,550 |   |
| Cash      and cash equivalents:                                                              |   |                              |    |   |   |   |   |   |
| Beginning      of period                                                                     |   |                              | 207,495 |   |   |   | 25,262 |   |
| End      of period                                                                           |   | $                                 | 164,387 |   |   | $ | 150,812 |   |
|                                                                                         |   |                              |    |   |   |   |   |   |
| Supplemental      Disclosures of Cash Flow Information                                       |   |                              |    |   |   |   |   |   |
| Cash      payments for:                                                                      |   |                              |    |   |   |   |   |   |
| Interest                                                                                     |   | $                                 | 5,581   |   |   | $ | 6,657 |   |
| Income      taxes                                                                            |   |                              | 72      |   |   |   | - |   |
| Non-cash      investing and financing activities:                                            |   |                              |    |   |   |   |   |   |
| Transfers      from loans to other real estate owned                                         |   |                              | 5,415   |   |   |   | 2,721 |   |
| Dividends      declared, not yet paid                                                        |   |                              | 240     |   |   |   | - |   |
| Change      in unrealized gain on investment securities, net of      taxes                   |   |                              | (274    | ) |   |   | (983 | ) |

----

----

|                                                         |   | Three      Months Ended March 31, |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                         |   | 2010                              |   |   | 2009 |   |
|                                                         |   | (Unaudited;      in thousands)    |   |
|                                                         |   |                              |   |   |   |   |   |   |
| Net      income                                              |   | $                                 | 436    |   |   | $ | 3,231 |   |
| Securities      available for sale:                          |   |                              |   |   |   |   |   |   |
| Net      change in unrealized (losses)                       |   |                              | (395   | ) |   |   | (946 | ) |
| Related      income tax expense                              |   |                              | 140    |   |   |   | 676 |   |
| Net      securities gains reclassified into earnings         |   |                              | (47    | ) |   |   | (698 | ) |
| Related      income tax benefit                              |   |                              | 28     |   |   |   | 266 |   |
| Net      effect on other comprehensive income for the period |   |                              | (274   | ) |   |   | (702 | ) |
| Comprehensive      income                                    |   | $                                 | 162    |   |   | $ | 2,529 |   |

|                                                                                        |   | Three      Months Ended March 31,                               |      |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|-----------|
|                                                                                        |   | 2010                                                            |      |   | 2009 |   |
|                                                                                        |   | (Unaudited;      in thousands, except share and per share data) |      |
| Net      income                                                                             |   | $                                                               | 436       |   |   | $ | 3,231 |   |
| Dividends      and discount accretion on preferred shares                                   |   |                                                            | 529       |   |   |   | 23 |   |
| Net      (loss) income available to common shareholders                                     |   | $                                                               | (93       | ) |   | $ | 3,208 |   |
| Weighted      average common shares issued                                                  |   |                                                            | 6,856,800 |   |   |   | 6,856,800 |   |
| LESS:      Weighted average treasury stock shares                                           |   |                                                            | (416,016  | ) |   |   | (408,252 | ) |
| LESS:      Weighted average unearned Employee Stock Ownership Plan (ESOP) stock      shares |   |                                                            | -         |   |   |   | - |   |
| Weighted      average common shares outstanding, net                                        |   |                                                            | 6,440,784 |   |   |   | 6,448,548 |   |
| Basic      (loss) earnings per common share                                                 |   | $                                                               | (0.01     | ) |   | $ | 0.50 |   |
| Weighted      average dilutive shares from stock option plan                                |   |                                                            | -         |   |   |   | 9,632 |   |
| Weighted      average common shares outstanding including derivative      shares            |   |                                                            | 6,440,784 |   |   |   | 6,458,180 |   |
| Diluted      (loss) earnings per common share                                               |   | $                                                               | (0.01     | ) |   | $ | 0.50 |   |

----

| AVAILABLE      FOR SALE                     |   | Amortized      Cost |    |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|---------------------------------------------|--------|---------------------|---------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                        |   | (In      thousands) |    |
| March      31, 2010                         |   |                |    |   |                        |   |   |                         |   |   |            |   |
| Government      sponsored agencies          |   | $                   | 53,354  |   |                        | $      | 37     |                         |   | $      | (25             | )      |   | $ | 53,366 |   |
| States      and political subdivisions      |   |                | 26,080  |   |                        |   | 440    |                         |   |   | (93             | )      |   |   | 26,427 |   |
| Residential      mortgage-backed securities |   |                | 44,956  |   |                        |   | 687    |                         |   |   | (1,205          | )      |   |   | 44,438 |   |
| Totals                                      |   | $                   | 124,390 |   |                        | $      | 1,164  |                         |   | $      | (1,323          | )      |   | $ | 124,231 |   |
|                                        |   |                |    |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                      |   |                |    |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| Government      sponsored agencies          |   | $                   | 68,502  |   |                        | $      | 23     |                         |   | $      | (143            | )      |   | $ | 68,382 |   |
| States      and political subdivisions      |   |                | 26,112  |   |                        |   | 494    |                         |   |   | (87             | )      |   |   | 26,519 |   |
| Residential      mortgage-backed securities |   |                | 41,906  |   |                        |   | 563    |                         |   |   | (614            | )      |   |   | 41,855 |   |
| Equity      securities                      |   |                | -       |   |                        |   | -      |                         |   |   | -               |   |   |   | - |   |
| Totals                                      |   | $                   | 136,520 |   |                        | $      | 1,080  |                         |   | $      | (844            | )      |   | $ | 136,756 |   |

----

| HELD      TO MATURITY                  |   | Amortized      Cost |   |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|----------------------------------------|--------|---------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                   |   | (In      thousands) |   |
| March      31, 2010                    |   |                |   |   |                        |   |   |                         |   |   |            |   |
| States      and political subdivisions |   | $                   | 11,353 |   |                        | $      | -      |                         |   | $      | (561            | )      |   | $ | 10,792 |   |
| Totals                                 |   | $                   | 11,353 |   |                        | $      | -      |                         |   | $      | (561            | )      |   | $ | 10,792 |   |
|                                   |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                 |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| States      and political subdivisions |   | $                   | 11,436 |   |                        | $      | -      |                         |   | $      | (628            | )      |   | $ | 10,808 |   |
| Totals                                 |   | $                   | 11,436 |   |                        | $      | -      |                         |   | $      | (628            | )      |   | $ | 10,808 |   |

| OTHER      INVESTMENTS                                               |   | Amortized      Cost |   |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|----------------------------------------------------------------------|--------|---------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                                                 |   | (In      thousands) |   |
| March      31, 2010                                                  |   |                |   |   |                        |   |   |                         |   |   |            |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                   | 8,220  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 8,220 |   |
| Investment      in unconsolidated trusts                             |   |                | 1,116  |   |                        |   | -      |                         |   |   | -               |   |   |   | 1,116 |   |
| Totals                                                               |   | $                   | 9,336  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 9,336 |   |
|                                                                 |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                                               |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                   | 8,452  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 8,452 |   |
| Investment      in unconsolidated trusts                             |   |                | 1,116  |   |                        |   | -      |                         |   |   | -               |   |   |   | 1,116 |   |
| Totals                                                               |   | $                   | 9,568  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 9,568 |   |

|                       |   | Three      Months Ended March 31, |   |
|----------------------------|--------|-----------------------------------|--------|
|                       |   | 2010                              |   |   | 2009 |   |
|                       |   | (In      thousands)               |   |
| Gross      realized gains  |   | $                                 | 47     |   |   | $ | 698 |   |
| Gross      realized losses |   |                              | -      |   |   |   | - |   |
| Net      gains             |   | $                                 | 47     |   |   | $ | 698 |   |

----

|                                        |   | Less      than 12 Months |   |   | 12      Months or Longer |   |   | Total           |   |
|---------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-----------------|--------|
| AVAILABLE      FOR SALE                     |   | Fair      Value          |   |   | Unrealized      Losses   |   |   | Fair      Value |   |   | Unrealized      Losses |   |   | Fair      Value |   |   | Unrealized      Losses |   |
|                                        |   | (In      thousands)      |   |
| March      31, 2010                         |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |
| Government      sponsored agencies          |   | $                        | 30,437 |   |                     | $      | (25    | )               |   | $ | - |   |   | $ | - |   |   | $ | 30,437 |   |   | $ | (25 | ) |
| States      and political subdivisions      |   |                     | 4,533  |   |                     |   | (93    | )               |   |   | - |   |   |   | - |   |   |   | 4,533 |   |   |   | (93 | ) |
| Residential      mortgage-backed securities |   |                     | 19,212 |   |                     |   | (1,122 | )               |   |   | 1,439 |   |   |   | (83 | ) |   |   | 20,651 |   |   |   | (1,205 | ) |
| Totals                                      |   | $                        | 54,182 |   |                     | $      | (1,240 | )               |   | $ | 1,439 |   |   | $ | (83 | ) |   | $ | 55,621 |   |   | $ | (1,323 | ) |
|                                        |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2009                      |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government      sponsored agencies          |   | $                        | 25,855 |   |                     | $      | (143   | )               |   | $ | - |   |   | $ | - |   |   | $ | 25,855 |   |   | $ | (143 | ) |
| States      and political subdivisions      |   |                     | 4,540  |   |                     |   | (87    | )               |   |   | - |   |   |   | - |   |   |   | 4,540 |   |   |   | (87 | ) |
| Residential      mortgage-backed securities |   |                     | 20,579 |   |                     |   | (527   | )               |   |   | 1,481 |   |   |   | (87 | ) |   |   | 22,060 |   |   |   | (614 | ) |
| Totals                                      |   | $                        | 50,974 |   |                     | $      | (757   | )               |   | $ | 1,481 |   |   | $ | (87 | ) |   | $ | 52,455 |   |   | $ | (844 | ) |

|                                   |   | Less      than 12 Months |   |   | 12      Months or Longer |   |   | Total           |   |
|----------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-----------------|--------|
| HELD      TO MATURITY                  |   | Fair      Value          |   |   | Unrealized      Losses   |   |   | Fair      Value |   |   | Unrealized      Losses |   |   | Fair      Value |   |   | Unrealized      Losses |   |
|                                   |   | (In      thousands)      |   |
| March      31, 2010                    |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |
| States      and political subdivisions |   | $                        | 9,651  |   |                     | $      | (245   | )               |   | $ | 1,702 |   |   | $ | (316 | ) |   | $ | 11,353 |   |   | $ | (561 | ) |
| Totals                                 |   | $                        | 9,651  |   |                     | $      | (245   | )               |   | $ | 1,702 |   |   | $ | (316 | ) |   | $ | 11,353 |   |   | $ | (561 | ) |
|                                   |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2009                 |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| States      and political subdivisions |   | $                        | 9,937  |   |                     | $      | (297   | )               |   | $ | 1,499 |   |   | $ | (331 | ) |   | $ | 11,436 |   |   | $ | (628 | ) |
| Totals                                 |   | $                        | 9,937  |   |                     | $      | (297   | )               |   | $ | 1,499 |   |   | $ | (331 | ) |   | $ | 11,436 |   |   | $ | (628 | ) |

|                                            |   | Available      for Sale |    |   | Held      to Maturity |   |    | Other      Investments |   |
|-------------------------------------------------|--------|-------------------------|---------|--------|-----------------------|--------|---------|------------------------|--------|
|                                            |   | Amortized      Cost     |    |   | Fair      Value       |   |    | Amortized      Cost    |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |
|                                            |   | (In      thousands)     |    |
| One      year or less                           |   | $                       | 6,271   |   |                  | $      | 6,285   |                   |   | $ | - |   |   | $ | - |   |   | $ | 100 |   |   | $ | 100 |   |
| One      to five years                          |   |                    | 62,005  |   |                  |   | 62,187  |                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Five      to ten years                          |   |                    | 17,991  |   |                  |   | 18,198  |                   |   |   | 1,459 |   |   |   | 1,459 |   |   |   | - |   |   |   | - |   |
| Over      ten years                             |   |                    | 38,123  |   |                  |   | 37,561  |                   |   |   | 9,894 |   |   |   | 9,333 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Equity      investments with no stated maturity |   |                    | -       |   |                  |   | -       |                   |   |   | - |   |   |   | - |   |   |   | 8,120 |   |   |   | 8,120 |   |
|                                            |   | $                       | 124,390 |   |                  | $      | 124,231 |                   |   | $ | 11,353 |   |   | $ | 10,792 |   |   | $ | 9,336 |   |   | $ | 9,336 |   |

----

|                           |   | March      31,      |      |   | December      31, |   |
|--------------------------------|--------|---------------------|-----------|--------|-------------------|--------|
|                           |   | 2010                |      |   | 2009              |   |
|                           |   | (In      thousands) |      |
| Commercial                     |   | $                   | 135,081   |   |              | $      | 137,684 |   |
| Commercial      real estate    |   |                | 435,624   |   |              |   | 452,235 |   |
| Residential      real estate   |   |                | 419,513   |   |              |   | 399,588 |   |
| Construction      real estate  |   |                | 180,655   |   |              |   | 194,179 |   |
| Installment      and other     |   |                | 52,862    |   |              |   | 58,456 |   |
| Total      loans               |   |                | 1,223,735 |   |              |   | 1,242,142 |   |
| Unearned      income           |   |                | (2,215    | )      |              |   | (2,356 | ) |
| Gross      loans               |   |                | 1,221,520 |   |              |   | 1,239,786 |   |
| Allowance      for loan losses |   |                | (24,822   | )      |              |   | (24,504 | ) |
| Net      loans                 |   | $                   | 1,196,698 |   |              | $      | 1,215,282 |   |

|                            |   | At      March 31, 2010 |   | At      December 31, 2009 |   |
|---------------------------------|--------|------------------------|--------|---------------------------|--------|
|                            |   | (In      thousands)    |   |
| Non-accruing      loans         |   | $                      | 64,463 |                      |   | $ | 65,035 |   |
| Total      non-performing loans |   |                   | 64,463 |                      |   |   | 65,035 |   |

|                                                                 |   | March      31,      |   |   | December      31, |   |
|----------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                                                 |   | 2010                |   |   | 2009              |   |
|                                                                 |   | (In      thousands) |   |
| Loans      for which there was a related allowance for credit losses |   | $                   | 2,684  |   |              | $      | - |   |
| Other      impaired loans                                            |   |                | 71,706 |   |              |   | 67,736 |   |
| Total      impaired loans                                            |   | $                   | 74,390 |   |              | $      | 67,736 |   |
|                                                                 |   |                |   |   |              |   |   |   |
| Average      monthly balance of impaired loans                       |   | $                   | 69,721 |   |              | $      | 51,884 |   |
| Related      allowance for credit losses                             |   | $                   | 263    |   |              | $      | - |   |
| Interest      income recognized on an accrual basis                  |   | $                   | 118    |   |              | $      | 75 |   |
| Interest      income recognized on a cash basis                      |   | $                   | 68     |   |              | $      | 320 |   |

----

|                              |   | Three      Months Ended March 31, |   |   | Year      Ended December 31, |   |
|-----------------------------------|--------|-----------------------------------|--------|--------|------------------------------|--------|
|                              |   | 2010                              |   |   | 2009                         |   |
|                              |   | (In      thousands)               |   |
| Balance,      beginning of period |   | $                                 | 24,504 |   |                         | $      | 15,230 |   |
| Provision      for loan losses    |   |                              | 4,257  |   |                         |   | 26,024 |   |
| Charge-offs                       |   |                              | (4,059 | )      |                         |   | (17,379 | ) |
| Recoveries                        |   |                              | 120    |   |                         |   | 629 |   |
| Net      charge-offs              |   |                              | (3,939 | )      |                         |   | (16,750 | ) |
| Balance,      end of period       |   | $                                 | 24,822 |   |                         | $      | 24,504 |   |

|                         |   | At      March 31, 2010 |   |   | At      December 31, 2009 |   |
|------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                         |   | (In      thousands)    |   |
| Construction      property   |   | $                      | 12,196 |   |                      | $      | 12,782 |   |
| Residential      real estate |   |                   | 4,648  |   |                      |   | 3,337 |   |
| Commercial      real estate  |   |                   | 3,181  |   |                      |   | 631 |   |
| Total                        |   | $                      | 20,025 |   |                      | $      | 16,750 |   |

----

|                                |   | Shares |    |   | Weighted-Average      Exercise Price |   |   | Weighted-Average      Remaining Contractual Term, in years |   |   | Aggregate      Intrinsic Value (in thousands) |   |
|-------------------------------------|--------|--------|---------|--------|--------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|
| Outstanding      at January 1, 2010 |   |   | 412,500 |   |                                 | $      | 27.03  |                                                       |   |   |                                          |   |   |   |
| Granted                             |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Exercised                           |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Forfeited      or expired           |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Outstanding      at March 31, 2010  |   |   | 412,500 |   |                                 | $      | 27.03  |                                                       |   |   | 2.57                                          |   |   | $ | 1,729 |   |
| Exercisable      at March 31, 2010  |   |   | 229,000 |   |                                 | $      | 26.77  |                                                       |   |   | 3.34                                          |   |   | $ | 995 |   |

----

|                                                           |   | Trust      I                |   |   | Trust      III         |                  |   | Trust      IV          |   |   | Trust      V            |   |
|----------------------------------------------------------------|--------|-----------------------------|--------|--------|------------------------|-----------------------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                           |   | (Dollars      in thousands) |   |
| Date      of Issue                                             |   | March      23, 2000         |   |   | May      11, 2004      |                  |   | June      29, 2005     |   |   | September      21, 2006 |   |
| Amount      of trust preferred securities issued               |   | $                           | 10,000 |   |                   | $                     | 6,000  |                   |   | $      | 10,000                  |   |   | $ | 10,000 |   |
| Rate      on trust preferred securities                        |   |                        | 10.875 | %      |                   | 2.95%      (variable) |   |                   |   | 6.88   | %                       |   |   | 6.83 | % |
| Maturity                                                       |   | March      8, 2030          |   |   | September      8, 2034 |                  |   | November      23, 2035 |   |   | December      15, 2036  |   |
| Date      of first redemption                                  |   | March      8, 2010          |   |   | September      8, 2009 |                  |   | August      23, 2010   |   |   | September      15, 2011 |   |
| Common      equity securities issued                           |   | $                           | 310    |   |                   | $                     | 186    |                   |   | $      | 310                     |   |   | $ | 310 |   |
| Junior      subordinated deferrable interest debentures owed   |   | $                           | 10,310 |   |                   | $                     | 6,186  |                   |   | $      | 10,310                  |   |   | $ | 10,310 |   |
| Rate      on junior subordinated deferrable interestdebentures |   |                        | 10.875 | %      |                   | 2.95%      (variable) |   |                   |   | 6.88   | %                       |   |   | 6.83 | % |

----

|                                            |   | Contract      Amount |    |
|-------------------------------------------------|--------|----------------------|---------|
|                                            |   | March      31, 2010  |    |   | December      31,2009 |   |
|                                            |   | (In      thousands)  |    |
| Unfunded      commitments under lines of credit |   | $                    | 151,889 |   |   | $ | 155,535 |   |
| Commercial      and standby letters of credit   |   |                 | 12,740  |   |   |   | 14,628 |   |

----

|                                                | Number      of shares issued | Dividend      rate                            |   | Liquidation      value per share |   |   | Original      cost, in thousands |   |
|-----------------------------------------------------|------------------------------|-----------------------------------------------|--------|----------------------------------|--------|--------|----------------------------------|--------|
| Series      A cumulative perpetual preferred shares | 35,539                       | 5 %      for the first 5 years, thereafter 9% |   | $                                | 1,000  |   |                             | $      | 33,437 |   |
| Series      B cumulative perpetual preferred shares | 1,777                        | 9%                                            |   |                             | 1,000  |   |                             |   | 2,102 |   |

----

| · | Level      1: Quoted prices (unadjusted) for identical assets or liabilities in      active markets that the entity has the ability to access as of the      measurement date. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level      2: Significant other observable inputs other than Level 1 prices such as      quoted prices for similar assets or liabilities; quoted prices in markets      that are not active; or other inputs that are observable or can be      corroborated by observable marketdata. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level      3: Significant unobservable inputs that reflect a reporting entity’s own      assumptions about the assumptions that market participants would use in      pricing an asset or liability. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| March      31, 2010                                                                                                 |   | Total               |   |   | Quoted      Prices in Active Markets for Identical Assets (Level    1) |   |   | Significant      Other Observable Inputs (Level 2) |   |   | Significant      Unobservable Inputs (Level 3) |   |
|---------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|------------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                                                                                                |   | (In      thousands) |   |
| Financial      Assets:                                                                                              |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |
| Investment      securities available for sale:                                                                      |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |
| Available      for sale                                                                                             |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |
| Government      sponsored agencies                                                                                  |   | $                   | 53,366 |   |                                                                   | $      | -      |                                               |   | $      | 53,366                                         |   |   | $ | - |   |
| States      and political subdivisions                                                                              |   |                | 26,427 |   |                                                                   |   | -      |                                               |   |   | 26,427                                         |   |   |   | - |   |
| Residential      mortgage-backed securities                                                                         |   |                | 44,438 |   |                                                                   |   | -      |                                               |   |   | 44,438                                         |   |   |   | - |   |
| Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs, net asset           |   |                | 229    |   |                                                                   |   | -      |                                               |   |   | 229                                            |   |   |   | - |   |
|                                                                                                                |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Liabilities:                                                                                         |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
|  Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs, net liability |   | $                   | 1      |   |                                                                   | $      | -      |                                               |   | $      | 1                                              |   |   | $ | - |   |
|                                                                                                                |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Off-balance-sheet      instruments:                                                                                 |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Loan      commitments and standby letters of credit                                                                 |   | $                   | 24     |   |                                                                   | $      | -      |                                               |   | $      | 24                                             |   |   | $ | - |   |
|                                                                                                                |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| December      31, 2009                                                                                              |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Assets:                                                                                              |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Investment      securities available for sale:                                                                      |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Available      for sale                                                                                             |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Government      sponsored agencies                                                                                  |   | $                   | 68,382 |   |                                                                   | $      | -      |                                               |   | $      | 68,382                                         |   |   | $ | - |   |
| States      and political subdivisions                                                                              |   |                | 26,519 |   |                                                                   |   | -      |                                               |   |   | 26,519                                         |   |   |   | - |   |
| Residential      mortgage-backed securities                                                                         |   |                | 41,855 |   |                                                                   |   | -      |                                               |   |   | 41,855                                         |   |   |   | - |   |
| Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs, net asset           |   |                | 251    |   |                                                                   |   | -      |                                               |   |   | 251                                            |   |   |   | - |   |
|                                                                                                                |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Liabilities:                                                                                         |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
|  Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs, net liability |   | $                   | 1      |   |                                                                   | $      | -      |                                               |   | $      | 1                                              |   |   | $ | - |   |
|                                                                                                                |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Off-balance-sheet      instruments:                                                                                 |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Loan      commitments and standby letters of credit                                                                 |   | $                   | 24     |   |                                                                   | $      | -      |                                               |   | $      | 24                                             |   |   | $ | - |   |

----

----

| March      31, 2010            |   | Total               |   |   | Quoted      Prices in Active Markets for Identical Assets (Level    1) |   |   | Significant      Other Observable Inputs (Level 2) |   |   | Significant      Unobservable Inputs (Level 3) |   |
|--------------------------------|--------|---------------------|--------|--------|------------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|------------------------------------------------|--------|
|                           |   | (In      thousands) |   |
| Financial      Assets:         |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |
| Impaired      loans            |   | $                   | 16,484 |   |                                                                   | $      | -      |                                               |   | $      | -                                              |   |   | $ | 16,484 |   |
| Loans      held for sale       |   |                | 579    |   |                                                                   |   | -      |                                               |   |   | 579                                            |   |   |   | - |   |
| Mortgage      servicing rights |   |                | 3,028  |   |                                                                   |   | -      |                                               |   |   | -                                              |   |   |   | 3,028 |   |
| Non-Financial      Assets:     |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Foreclosed      assets         |   |                | 20,025 |   |                                                                   |   | -      |                                               |   |   | -                                              |   |   |   | 20,025  |   |
|                           |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| December      31, 2009         |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
|                           |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Assets:         |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Impaired      loans            |   | $                   | 14,954 |   |                                                                   | $      | -      |                                               |   | $      | -                                              |   |   | $ | 14,954 |   |
| Loans      held for sale       |   |                | 3,522  |   |                                                                   |   | -      |                                               |   |   | 3,522                                          |   |   |   | - |   |
| Mortgage      servicing rights |   |                | 3,049  |   |                                                                   |   | -      |                                               |   |   | -                                              |   |   |   | 3,049 |   |
| Non-Financial      Assets:     |   |                |   |   |                                                                   |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Foreclosed      assets         |   |                | 16,750 |   |                                                                   |   | -      |                                               |   |   | -                                              |   |   |   | 16,750 |   |

----

|                                                                    |   | March      31, 2010  |      |   | December      31, 2009 |   |
|-------------------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                                                    |   | Carrying      amount |      |   | Fair      value        |   |   | Carrying      amount |   |   | Fair      value |   |
|                                                                    |   | (In      thousands)  |      |
| Financial      assets:                                                  |   |                 |      |   |                   |   |   |   |   |   |   |   |
| Cash      and due from banks                                            |   | $                    | 20,275    |   |                   | $      | 20,275 |   |   | $ | 18,761 |   |   | $ | 18,761 |   |
| Interest-bearing      deposits with banks                               |   |                 | 143,709   |   |                   |   | 143,709 |   |   |   | 188,114 |   |   |   | 188,114 |   |
| Federal      funds sold and securities purchased under resellagreements |   |                 | 403       |   |                   |   | 403 |   |   |   | 620 |   |   |   | 620 |   |
| Investments:                                                            |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
|     Available      for sale                         |   |                 | 124,231   |   |                   |   | 124,231 |   |   |   | 136,756 |   |   |   | 136,756 |   |
|     Held      to maturity                           |   |                 | 11,353    |   |                   |   | 10,792 |   |   |   | 11,436 |   |   |   | 10,808 |   |
|     Other      investments                          |   |                 | 8,220     |   |                   |   | 8,220 |   |   |   | 9,568 |   |   |   | 9,568 |   |
| Loans,      net                                                         |   |                 | 1,196,698 |   |                   |   | 1,185,277  |   |   |   | 1,215,282 |   |   |   | 1,203,138 |   |
| Loans      held for sale                                                |   |                 | 7,893     |   |                   |   | 7,933 |   |   |   | 9,245 |   |   |   | 9,268 |   |
| Accrued      interest receivable                                        |   |                 | 6,871     |   |                   |   | 6,871 |   |   |   | 6,840 |   |   |   | 6,840 |   |
| Mortgage      servicing rights                                          |   |                 | 7,645     |   |                   |   | 8,846 |   |   |   | 7,647 |   |   |   | 8,754 |   |
| Derivative      financial instruments                                   |   |                 | 229       |   |                   |   | 229 |   |   |   | 251 |   |   |   | 251 |   |
|                                                                    |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:                                             |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest      bearing deposits                                      |   | $                    | 90,234    |   |                   | $      | 90,234 |   |   | $ | 87,238 |   |   | $ | 87,238 |   |
| Interest      bearing deposits                                          |   |                 | 1,307,219 |   |                   |   | 1,310,277 |   |   |   | 1,381,207 |   |   |   | 1,385,968 |   |
| Short-term      borrowings                                              |   |                 | 1,183     |   |                   |   | 1,233 |   |   |   | 20,000 |   |   |   | 20,182 |   |
| Long-term      borrowings                                               |   |                 | 32,300    |   |                   |   | 40,824 |   |   |   | 13,493 |   |   |   | 14,620 |   |
| Junior      subordinated debt owed to unconsolidated trusts             |   |                 | 37,116    |   |                   |   | 18,118 |   |   |   | 37,116 |   |   |   | 18,118 |   |
| Accrued      interest payable                                           |   |                 | 4,514     |   |                   |   | 4,514 |   |   |   | 5,038 |   |   |   | 5,038 |   |
| Derivative      financial instruments                                   |   |                 | 1         |   |                   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                                                    |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance      sheet instruments:                                     |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Standby      letters of credit                                          |   | $                    | 24        |   |                   | $      | 24 |   |   | $ | 24 |   |   | $ | 24 |   |

----

----

|                                             |   | Three      Months Ended March 31, |   |
|--------------------------------------------------|--------|-----------------------------------|--------|
|                                             |   | 2010                              |   |   | 2009 |   |
|                                             |   | (In      thousands)               |   |
| Balance      at beginning of period              |   | $                                 | 8,525  |   |   | $ | 6,908 |   |
| Servicing      rights originated and capitalized |   |                              | 307    |   |   |   | 1,480 |   |
| Amortization                                     |   |                              | (502   | ) |   |   | (642 | ) |
|                                             |   | $                                 | 8,330  |   |   | $ | 7,746 |   |

|                                             |   | Three      Months Ended March 31, |   |
|--------------------------------------------------|--------|-----------------------------------|--------|
|                                             |   | 2010                              |   |   | 2009 |   |
|                                             |   | (In      thousands)               |   |
| Balance      at beginning of period              |   | $                                 | (878   | ) |   | $ | (1,637 | ) |
| Aggregate      reductions credited to operations |   |                              | 332    |   |   |   | 504 |   |
| Aggregate      additions charged to operations   |   |                              | (139   | ) |   |   | (848 | ) |
|                                             |   | $                                 | (685   | ) |   | $ | (1,981 | ) |

----

|                                            |   | March      31, 2010 |   |   | December      31, 2009 |   |
|-------------------------------------------------|--------|---------------------|--------|--------|------------------------|--------|
| Prepayment      Standard Assumption (PSA) speed |   |                | 228.00 | %      |                   |   | 232.00 | % |
| Discount      rate                              |   |                | 10.76  |   |                   |   | 10.76 |   |
| Earnings      rate                              |   |                | 2.73   |   |                   |   | 2.75 |   |

----

|                                                               |   | Three      Months Ended March 31, |      |
|--------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                               |   | 2010                              |      |   | 2009 |   |
|                                                               |   | Average      Balance              |      |   | Interest |   |   | Yield/Rate |   |   | Average      Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                               |   | (Dollars      in thousands)       |      |
| Interest-earning      Assets:                                      |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)                                                           |   | $                                 | 1,236,032 |   |   | $ | 17,272 |   |   |   | 5.67 | % |   | $ | 1,255,147 |   |   | $ | 18,992 |   |   |   | 6.14 | % |
| Taxable      investment securities                                 |   |                              | 116,315   |   |   |   | 633 |   |   |   | 2.21 |   |   |   | 62,736 |   |   |   | 198 |   |   |   | 1.28 |   |
| Investment      securities exempt from federal income taxes (2)    |   |                              | 37,491    |   |   |   | 482 |   |   |   | 5.21 |   |   |   | 21,658 |   |   |   | 349 |   |   |   | 6.54 |   |
| Federal      funds sold                                            |   |                              | 511       |   |   |   | - |   |   |   | - |   |   |   | 2,205 |   |   |   | 1 |   |   |   | 0.18 |   |
| Other      interest-bearing deposits                               |   |                              | 138,583   |   |   |   | 105 |   |   |   | 0.31 |   |   |   | 36,736 |   |   |   | 9 |   |   |   | 0.10 |   |
| Investment      in unconsolidated trust subsidiaries               |   |                              | 1,116     |   |   |   | 20 |   |   |   | 7.27 |   |   |   | 1,116 |   |   |   | 21 |   |   |   | 7.63 |   |
| Total      interest-earning assets                                 |   |                              | 1,530,048 |   |   |   | 18,512 |   |   |   | 4.91 |   |   |   | 1,379,598 |   |   |   | 19,570 |   |   |   | 5.75 |   |
| Non-interest-earning      assets                                   |   |                              | 87,038    |   |   |   |   |   |   |   |   |   |   |   | 47,658 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                  |   | $                                 | 1,617,086 |   |   |   |   |   |   |   |   |   |   | $ | 1,427,256 |   |   |   |   |   |   |   |   |   |
|                                                               |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      Liabilities:                                 |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      deposits                                                  |   | $                                 | 102,279   |   |   | $ | 70 |   |   |   | 0.28 | % |   | $ | 104,889 |   |   | $ | 121 |   |   |   | 0.47 | % |
| Money      market deposits                                         |   |                              | 211,650   |   |   |   | 137 |   |   |   | 0.26 |   |   |   | 192,255 |   |   |   | 174 |   |   |   | 0.37 |   |
| Savings      deposits                                              |   |                              | 371,193   |   |   |   | 267 |   |   |   | 0.29 |   |   |   | 313,164 |   |   |   | 380 |   |   |   | 0.49 |   |
| Time      deposits over $100,000                                   |   |                              | 418,953   |   |   |   | 2,358 |   |   |   | 2.28 |   |   |   | 332,753 |   |   |   | 2,712 |   |   |   | 3.31 |   |
| Time      deposits under $100,000                                  |   |                              | 215,311   |   |   |   | 1,131 |   |   |   | 2.13 |   |   |   | 206,966 |   |   |   | 1,529 |   |   |   | 3.00 |   |
| Short-term      borrowings, including ESOP borrowings under 1 year |   |                              | 18,938    |   |   |   | 216 |   |   |   | 4.63 |   |   |   | 19,765 |   |   |   | 63 |   |   |   | 1.29 |   |
| Long-term      borrowings, including ESOP borrowings over 1 year   |   |                              | 14,549    |   |   |   | 128 |   |   |   | 3.57 |   |   |   | 28,526 |   |   |   | 311 |   |   |   | 4.42 |   |
| Long-term      capital lease obligations                           |   |                              | 2,211     |   |   |   | 67 |   |   |   | 12.29 |   |   |   | 2,211 |   |   |   | 67 |   |   |   | 12.29 |   |
| Junior      subordinated debt owed to unconsolidated trusts        |   |                              | 37,116    |   |   |   | 683 |   |   |   | 7.46 |   |   |   | 37,116 |   |   |   | 709 |   |   |   | 7.75 |   |
| Total      interest-bearing liabilities                            |   |                              | 1,392,200 |   |   |   | 5,057 |   |   |   | 1.47 |   |   |   | 1,237,645 |   |   |   | 6,066 |   |   |   | 1.99 |   |

----

|                                                                                  |   | Three      Months Ended March 31, |      |
|---------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                                  |   | 2010                              |      | 2009 |   |
|                                                                                  |   | Average      Balance              |      | Interest | Yield/Rate |   | Average      Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                                                  |   | (Dollars      in thousands)       |      |
| Demand      deposits--non-interest-bearing                                            |   | $                                 | 45,800    |   |   |   |   |   |   | $ | 48,655 |   |   |   |   |   |   |   |
| Other      non-interest-bearing liabilities                                           |   |                              | 55,848    |   |   |   |   |   |   |   | 35,232 |   |   |   |   |   |   |   |
| Stockholders'      equity, including stock owned by ESOP                              |   |                              | 123,238   |   |   |   |   |   |   |   | 105,724 |   |   |   |   |   |   |   |
| Total      liabilities and stockholders equity                                        |   | $                                 | 1,617,086 |   |   |   |   |   |   | $ | 1,427,256 |   |   |   |   |   |   |   |
| Net      interest income on a fully tax-equivalent basis/interest rate      Spread(3) | $      | 13,455                            |      | 3.43 | % |   |   |   |   |   | $ | 13,504 |   |   |   | 3.77 | % |
| Net      interest margin on a fully tax-equivalent basis(4)                           |   |                              | 3.57      | % |   |   |   |   |   |   |   |   |   |   | 3.97 | % |
| Net      interest margin(4)                                                           |   |                              |      |   | 3.52 | % |   |   |   |   |   |   |   |   |   |   | 3.93 | % |

| (1) | Average      loans include non-accrual loans of $67.8 million and $36.6 million for      March 31, 2010 and 2009, respectively. Interest income includes loan      origination fees of $540 thousand and $896 thousand for the three months      ended March 31, 2010 and 2009,respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Non-taxable      investment income is presented on a fully tax-equivalent basis, adjusting      for federal and state exemption of interest income and certain other      permanent tax differences. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Interest      rate spread represents the difference between the average yield on      interest-earning assets and the average cost of interest-bearing      liabilities and is presented on a fully tax-equivalent    basis. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Net      interest margin represents net interest income as a percentage of average      interest-earning assets. |
|-----|------------------------------------------------------------------------------------------------------------------|

|                                                  |   | Three      Months Ended March 31, |   |
|-------------------------------------------------------|--------|-----------------------------------|--------|
|                                                  |   | 2010                              |   |   | 2009 |   |
|                                                  |   | (In      thousands)               |   |
| Net      interest income                              |   | $                                 | 13,271 |   |   | $ | 13,372 |   |
| Tax-equivalent      adjustment to net interest income |   |                              | 184    |   |   |   | 132 |   |
| Net      interest income, fully tax-equivalent basis  |   | $                                 | 13,455 |   |   | $ | 13,504 |   |

----

|                                                                     |   | Three      Months Ended March 31, |   |
|--------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                     |   | 2010      Compared to 2009        |   |
|                                                                     |   | Change      Due to Volume         |   |   | Change      Due to Rate |   |   | Total      Change |   |
|                                                                     |   | (In      thousands)               |   |
| Interest-earning      Assets:                                            |   |                              |   |   |   |   |   |
|  Loans                                                              |   | $                                 | (285   | ) |   | $ | (1,435 | ) |   | $ | (1,720 | ) |
|  Taxable      investment securities                                 |   |                              | 236    |   |   |   | 199 |   |   |   | 435 |   |
|  Investment      securities exempt from federal income taxes(1)     |   |                              | 215    |   |   |   | (82 | ) |   |   | 133 |   |
|  Federal      funds sold                                            |   |                              | (1     | ) |   |   | (1 | ) |   |   | (1 | ) |
|  Other      interest bearing deposits                               |   |                              | 55     |   |   |   | 41 |   |   |   | 96 |   |
|  Investment      in unconsolidated trust subsidiaries               |   |                              | -      |   |   |   | (1 | ) |   |   | (1 | ) |
|  Total      increase (decrease) in interest income                  |   | $                                 | 220    |   |   | $ | (1,278 | ) |   | $ | (1,058 | ) |
| Interest-bearing      Liabilities:                                       |   |                              |   |   |   |
|  NOW      deposits                                                  |   | $                                 | (3     | ) |   | $ | (48 | ) |   | $ | (51 | ) |
|  Money      market deposits                                         |   |                              | 17     |   |   |   | (54 | ) |   |   | (37 | ) |
|  Savings      deposits                                              |   |                              | 61     |   |   |   | (174 | ) |   |   | (113 | ) |
|  Time      deposits over $100,000                                   |   |                              | 604    |   |   |   | (958 | ) |   |   | (354 | ) |
|  Time      deposits under $100,000                                  |   |                              | 60     |   |   |   | (458 | ) |   |   | (398 | ) |
|  Short-term      borrowings, including ESOP borrowings under 1 year |   |                              | (3     | ) |   |   | 156 |   |   |   | 153 |   |
|  Long-term      borrowings, including ESOP borrowings over 1 year   |   |                              | (131   | ) |   |   | (52 | ) |   |   | (183 | ) |
|  Long-term      capital lease obligations                           |   |                              | -      |   |   |   | - |   |   |   | - |   |
|  Junior      subordinated debt owed to unconsolidated trusts        |   |                              | -      |   |   |   | (26 | ) |   |   | (26 | ) |
|  Total      increase (decrease) in interest expense                 |   | $                                 | 604    |   |   | $ | (1,613 | ) |   | $ | (1,009 | ) |
|  Increase      (decrease) in net interest income                    |   | $                                 | (384   | ) |   | $ | 335 |   |   | $ | (49 | ) |

| (1) | Non-taxable      investment income is presented on a fully tax-equivalent basis, adjusting      for federal and state exemption of interest income and certain other      permanent income tax differences. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Three      Months Ended March 31, |   |   |   |   |
|-----------------------------------------|--------|-----------------------------------|--------|--------|--------|--------|
|                                    |   | 2010                              |   |   | 2009   |   |   | Net      difference |   |
|                                    |   | (In      thousands)               |   |
|  Other      income:                |   |                              |   |   |   |   |   |   |   |
|  Mortgage      loan servicing fees |   | $                                 | 646    |   |   | $      | 787 |   |   | $ | (141 | ) |
|  Trust      fees                   |   |                              | 355    |   |   |   | 376 |   |   |   | (21 | ) |
|  Loan      and other fees          |   |                              | 666    |   |   |   | 613 |   |   |   | 53 |   |
|  Service      charges on deposits  |   |                              | 408    |   |   |   | 407 |   |   |   | 1 |   |
|  Gain      on sale of loans        |   |                              | 720    |   |   |   | 3,069 |   |   |   | (2,349 | ) |
|  Gain      on sale of securities   |   |                              | 47     |   |   |   | 698 |   |   |   | (651 | ) |
|  Title      insurance premiums     |   |                              | 188    |   |   |   | 441 |   |   |   | (253 | ) |
|  Other      operating income       |   |                              | 26     |   |   |   | 103 |   |   |   | (77 | ) |
|                                    |   | $                                 | 3,056  |   |   | $      | 6,494 |   |   | $ | (3,438 | ) |

----

|                                                               |   | Three      Months Ended March 31, |   |   |   |   |
|--------------------------------------------------------------------|--------|-----------------------------------|--------|--------|--------|--------|
|                                                               |   | 2010                              |   |   | 2009   |   |   | Net      difference |   |
|                                                               |   | (In      thousands)               |   |
|  Other      expenses:                                         |   |                              |   |   |   |   |   |   |   |
|  Salaries      and employee benefits                          |   | $                                 | 5,078  |   |   | $      | 5,044 |   |   | $ | 34 |   |
|  Occupancy                                                    |   |                              | 977    |   |   |   | 824 |   |   |   | 153 |   |
|  Data      processing                                         |   |                              | 724    |   |   |   | 631 |   |   |   | 93 |   |
|  Marketing                                                    |   |                              | 356    |   |   |   | 448 |   |   |   | (92 | ) |
|  Amortization      and valuation of mortgage servicing rights |   |                              | 309    |   |   |   | 986 |   |   |   | (677 | ) |
|  Amortization      and valuation of other intangible assets   |   |                              | 125    |   |   |   | 123 |   |   |   | 2 |   |
|  Supplies                                                     |   |                              | 91     |   |   |   | 186 |   |   |   | (95 | ) |
|  Loss      on sale of other real estate owned                 |   |                              | 432    |   |   |   | 218 |   |   |   | 214 |   |
|  Postage                                                      |   |                              | 161    |   |   |   | 167 |   |   |   | (6 | ) |
|  Bankcard      and ATM network fees                           |   |                              | 163    |   |   |   | 330 |   |   |   | (167 | ) |
|  Legal,      professional and accounting fees                 |   |                              | 753    |   |   |   | 368 |   |   |   | 385 |   |
|  FDIC      insurance premiums                                 |   |                              | 898    |   |   |   | 247 |   |   |   | 651 |   |
|  Collection      expenses                                     |   |                              | 380    |   |   |   | 122 |   |   |   | 258 |   |
|  Other                                                        |   |                              | 538    |   |   |   | 795 |   |   |   | (257 | ) |
|                                                               |   | $                                 | 10,985 |   |   | $      | 10,489 |   |   | $ | 496 |   |

----

|                                                                 |   | At      March 31, 2010 |    |   | At      December 31, 2009 |   |    | At      March 31, 2009 |   |
|----------------------------------------------------------------------|--------|------------------------|---------|--------|---------------------------|--------|---------|------------------------|--------|
|                                                                 |   | Amortized      Cost    |    |   | Fair      Value           |   |    | Amortized      Cost    |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |
|                                                                 |   | (In      thousands)    |    |
| Securities      Available for Sale:                                  |   |                   |    |   |                      |   |    |                   |   |   |   |   |   |   |   |   |   |   |
| Government      sponsored agencies                                   |   | $                      | 53,354  |   |                      | $      | 53,366  |                   |   | $ | 68,502 |   |   | $ | 68,382 |   |   | $ | 46,356 |   |   | $ | 47,727 |   |
| States      and political subdivisions                               |   |                   | 26,080  |   |                      |   | 26,427  |                   |   |   | 26,112 |   |   |   | 26,519 |   |   |   | 12,766 |   |   |   | 12,985 |   |
| Residential      mortgage-backed securities                          |   |                   | 44,956  |   |                      |   | 44,438  |                   |   |   | 41,906 |   |   |   | 41,855 |   |   |   | 7,306 |   |   |   | 6,899 |   |
| Equity      securities                                               |   |                   | -       |   |                      |   | -       |                   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | - |   |
| Total      securities available for sale                             |   | $                      | 124,390 |   |                      | $      | 124,231 |                   |   | $ | 136,520 |   |   | $ | 136,756 |   |   | $ | 66,429 |   |   | $ | 67,611 |   |
| Securities      Held to Maturity                                     |   |                   |    |   |                      |   |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government      sponsored agencies                                   |   | $                      | -       |   |                      | $      | -       |                   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| States      and political subdivisions                               |   |                   | 11,353  |   |                      |   | 10,792  |                   |   |   | 11,436 |   |   |   | 10,808 |   |   |   | 8,860 |   |   |   | 9,522 |   |
| Total      securities held to maturity                               |   | $                      | 11,353  |   |                      | $      | 10,792  |                   |   | $ | 11,436 |   |   | $ | 10,808 |   |   | $ | 8,860 |   |   | $ | 9,522 |   |
| Other      securities:                                               |   |                   |    |   |                      |   |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                      | 8,220   |   |                      | $      | 8,220   |                   |   | $ | 8,452 |   |   | $ | 8,452 |   |   | $ | 5,498 |   |   | $ | 5,498 |   |
| Investment      in unconsolidated trusts                             |   |                   | 1,116   |   |                      |   | 1,116   |                   |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Total      other securities                                          |   | $                      | 9,336   |   |                      | $      | 9,336   |                   |   | $ | 9,568 |   |   | $ | 9,568 |   |   | $ | 6,614 |   |   | $ | 6,614 |   |

----

|                           |   | At      March 31, 2010      |      |   | At      December 31, 2009 |   |   | At      March 31, 2009 |   |
|--------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|--------|------------------------|--------|
|                           |   | Amount                      |      |   | Percent                   |   |   | Amount                 |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                           |   | (Dollars      in thousands) |      |
| Commercial                     |   | $                           | 135,081   |   |                      |   | 11.04  | %                      |   | $ | 137,684 |   |   |   | 11.08 | % |   | $ | 121,631 |   |   |   | 9.89 | % |
| Commercial      real estate    |   |                        | 435,624   |   |                      |   | 35.60  |                   |   |   | 452,235 |   |   |   | 36.41 |   |   |   | 413,590 |   |   |   | 33.62 |   |
| Residential      real estate   |   |                        | 419,513   |   |                      |   | 34.28  |                   |   |   | 399,588 |   |   |   | 32.17 |   |   |   | 383,613 |   |   |   | 31.19 |   |
| Construction      real estate  |   |                        | 180,655   |   |                      |   | 14.76  |                   |   |   | 194,179 |   |   |   | 15.63 |   |   |   | 252,346 |   |   |   | 20.52 |   |
| Installment      and other     |   |                        | 52,862    |   |                      |   | 4.32   |                   |   |   | 58,456 |   |   |   | 4.71 |   |   |   | 58,764 |   |   |   | 4.78 |   |
| Total      loans               |   |                        | 1,223,735 |   |                      |   | 100.00 |                   |   |   | 1,242,142 |   |   |   | 100.00 |   |   |   | 1,229,944 |   |   |   | 100.00 |   |
| Unearned      income           |   |                        | (2,215    | )      |                      |   |   |                   |   |   | (2,356 | ) |   |   |   |   |   |   | (2,209 | ) |   |   |   |   |
| Gross      loans               |   |                        | 1,221,520 |   |                      |   |   |                   |   |   | 1,239,786 |   |   |   |   |   |   |   | 1,227,735 |   |   |   |   |   |
| Allowance      for loan losses |   |                        | (24,822   | )      |                      |   |   |                   |   |   | (24,504 | ) |   |   |   |   |   |   | (17,963 | ) |   |   |   |   |
| Net      loans                 |   | $                           | 1,196,698 |   |                      |   |   |                   |   | $ | 1,215,282 |   |   |   |   |   |   | $ | 1,209,772 |   |   |   |   |   |

|                                                         |   | At      March 31, 2010      |   |   | At      December 31, 2009 |   |   | At      March 31, 2009 |   |
|--------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|
|                                                         |   | (Dollars      in thousands) |   |
| Non-accruing      loans                                      |   | $                           | 64,463 |   |                      | $      | 65,035 |                   |   | $ | 40,467 |   |
| Loans      90 days or more past due, still accruing interest |   |                        | -      |   |                      |   | -      |                   |   |   | - |   |
| Total      non-performing loans                              |   |                        | 64,463 |   |                      |   | 65,035 |                   |   |   | 40,467 |   |
| Other      real estate owned                                 |   |                        | 20,025 |   |                      |   | 16,750 |                   |   |   | 4,143 |   |
| Other      repossessed assets                                |   |                        | 403    |   |                      |   | 406    |                   |   |   | 428 |   |
| Total      non-performing assets                             |   | $                           | 84,891 |   |                      | $      | 82,191 |                   |   | $ | 45,038 |   |
| Restructured      loans, still accruing interest             |   |                        | 2,990  |   |                      |   | 2,513  |                   |   |   | 36 |   |
| Total      non-performing loans to total loans               |   |                        | 5.27   | %      |                      |   | 5.24   | %                      |   |   | 3.29 | % |
| Allowance      for loan losses to non-performing loans       |   |                        | 38.51  | %      |                      |   | 37.68  | %                      |   |   | 44.39 | % |
| Total      non-performing assets to total assets             |   |                        | 5.30   | %      |                      |   | 4.90   | %                      |   |   | 2.95 | % |

----

|                                              |   | Three      Months Ended March 31, |      |
|---------------------------------------------------|--------|-----------------------------------|-----------|
|                                              |   | 2010                              |      |   | 2009 |   |
|                                              |   | (Dollars      in thousands)       |      |
| Balance      at beginning of period               |   | $                                 | 24,504    |   |   | $ | 15,230 |   |
| Provision      for loan losses                    |   |                              | 4,257     |   |   |   | 4,161 |   |
| Total      charge-offs                            |   |                              | (4,059    | ) |   |   | (1,622 | ) |
| Total      recoveries                             |   |                              | 120       |   |   |   | 194 |   |
| Net      charge-offs                              |   |                              | (3,939    | ) |   |   | (1,428 | ) |
| Balance      at end of period                     |   | $                                 | 24,822    |   |   | $ | 17,963 |   |
|                                              |   |                              |      |   |   |   |   |   |
| Gross      loans at end of period                 |   | $                                 | 1,221,520 |   |   | $ | 1,227,735 |   |
| Ratio      of allowance to total loans            |   |                              | 2.03      | % |   |   | 1.46 | % |
| Ratio      of net charge-offs to average loans(1) |   |                              | 1.29      | % |   |   | 0.46 | % |

| (1) | Net      charge-offs are annualized for the purposes of this      calculation. |
|-----|--------------------------------------------------------------------------------|

----

|                                        |   | At      December 31,        |   |
|---------------------------------------------|--------|-----------------------------|--------|
|                                        |   | At      March 31, 2010      |   |   | At      December 31, 2009 |   |   | At      March 31, 2009 |   |
|                                        |   | Amount                      |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                        |   | (Dollars      in thousands) |   |
| Commercial                                  |   | $                           | 6,048  |   |   |   | 11.04 | % |   | $ | 4,371 |   |   |   | 11.08 | % |   | $ | 2,717 |   |   |   | 9.89 | % |
| Commercial      and residential real estate |   |                        | 8,789  |   |   |   | 69.88 |   |   |   | 8,416 |   |   |   | 68.58 |   |   |   | 5,619 |   |   |   | 64.81 |   |
| Construction      real estate               |   |                        | 6,695  |   |   |   | 14.76 |   |   |   | 8,637 |   |   |   | 15.63 |   |   |   | 7,298 |   |   |   | 20.52 |   |
| Installment      and other                  |   |                        | 3,290  |   |   |   | 4.32 |   |   |   | 3,080 |   |   |   | 4.71 |   |   |   | 2,329 |   |   |   | 4.78 |   |
| Total                                       |   | $                           | 24,822 |   |   |   | 100.00 | % |   | $ | 24,504 |   |   |   | 100.00 | % |   | $ | 17,963 |   |   |   | 100.00 | % |

----

|                                             |   | At      March 31, 2010 |   |   | At      December 31, 2009 |   |   | At      March 31, 2009 |   |
|--------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|
|                                             |   | (In      thousands)    |   |
| Performing      loans classified as:             |   |                   |   |   |                      |   |   |                   |   |
| Substandard                                      |   | $                      | 28,883 |   |                      | $      | 30,648 |                   |   | $ | 48,403 |   |
| Doubtful                                         |   |                   | -      |   |                      |   | -      |                   |   |   | - |   |
| Total      performing adversely classified loans |   | $                      | 28,883 |   |                      | $      | 30,648 |                   |   | $ | 48,403 |   |
| Special      mention loans                       |   | $                      | 2,744  |   |                      | $      | 5,269  |                   |   | $ | 31,173 |   |

----

----

|                                                        |   | Time      to Maturity or Repricing |    |
|-------------------------------------------------------------|--------|------------------------------------|---------|
| As      of March 31, 2010:                                  |   | 0-90      Days                     |    | 91-365      Days |   |   | 1-5      Years |   |   | Over      5 Years |   |   | Total |   |
|                                                        |   | (Dollars      in thousands)        |    |
| Interest-earning      Assets:                               |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                       |   | $                                  | 479,124 |   | $ | 417,039 |   |   | $ | 268,783 |   |   | $ | 56,574 |   |   | $ | 1,221,520 |   |
| Loans      held for sale                                    |   |                               | 7,893   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,893 |   |
| Investment      securities                                  |   |                               | 15,703  |   |   | 20,231 |   |   |   | 62,350 |   |   |   | 45,520 |   |   |   | 143,804 |   |
| Securities      purchased under agreements to resell        |   |                               | 403     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 403 |   |
| Interest-bearing      deposits with banks                   |   |                               | 143,709 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 143,709 |   |
| Investment      in unconsolidated trusts                    |   |                               | 186     |   |   | - |   |   |   | - |   |   |   | 930 |   |   |   | 1,116 |   |
| Total      interest-earning assets                          |   | $                                  | 647,018 |   | $ | 437,270 |   |   | $ | 331,133 |   |   | $ | 103,024 |   |   | $ | 1,518,445 |   |
|                                                        |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      Liabilities:                          |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      deposits                                           |   | $                                  | 46,556  |   | $ | 88,649 |   |   | $ | - |   |   | $ | - |   |   | $ | 135,205 |   |
| Money      market deposits                                  |   |                               | 78,793  |   |   | 107,950 |   |   |   | - |   |   |   | - |   |   |   | 186,743 |   |
| Savings      deposits                                       |   |                               | 153,808 |   |   | 203,231 |   |   |   | - |   |   |   | - |   |   |   | 357,039 |   |
| Time      deposits over $100,000                            |   |                               | 125,976 |   |   | 229,708 |   |   |   | 53,345 |   |   |   | 3,255 |   |   |   | 412,284 |   |
| Time      deposits under $100,000                           |   |                               | 54,425  |   |   | 135,625 |   |   |   | 24,681 |   |   |   | 1,217 |   |   |   | 215,948 |   |
| Short-term      borrowings                                  |   |                               | 9       |   |   | 1,174 |   |   |   | - |   |   |   | - |   |   |   | 1,183 |   |
| Long-term      borrowings                                   |   |                               | -       |   |   | - |   |   |   | 10,000 |   |   |   | 22,300 |   |   |   | 32,300 |   |
| Capital      lease obligations                              |   |                               | -       |   |   | - |   |   |   | - |   |   |   | 2,211 |   |   |   | 2,211 |   |
| Junior      subordinated debt owed to unconsolidated trusts |   |                               | 6,186   |   |   | - |   |   |   | - |   |   |   | 30,930 |   |   |   | 37,116 |   |
| Total      interest-bearing liabilities                     |   | $                                  | 465,753 |   | $ | 766,337 |   |   | $ | 88,026 |   |   | $ | 59,913 |   |   | $ | 1,380,029 |   |
| Rate      sensitive assets (RSA)                            |   | $                                  | 647,018 |   | $ | 1,084,288 |   |   | $ | 1,415,421 |   |   | $ | 1,518,445 |   |   |   | 1,518,445 |   |
| Rate      sensitive liabilities (RSL)                       |   |                               | 465,753 |   |   | 1,232,090 |   |   |   | 1,320,116 |   |   |   | 1,380,029 |   |   |   | 1,380,029 |   |
| Cumulative      GAP (GAP=RSA-RSL)                           |   |                               | 181,265 |   |   | (147,802 | ) |   |   | 95,305 |   |   |   | 138,416 |   |   |   | 138,416 |   |
| RSA/Total      assets                                       |   |                               | 40.36   | % |   | 67.64 | % |   |   | 88.29 | % |   |   | 94.72 | % |   |   | 94.72 | % |
| RSL/Total      assets                                       |   |                               | 29.05   | % |   | 76.86 | % |   |   | 82.35 | % |   |   | 86.08 | % |   |   | 86.08 | % |
| GAP/Total      assets                                       |   |                               | 11.31   | % |   | (9.22 | % | )  |   | 5.94 | % |   |   | 8.63 | % |   |   | 8.63 | % |
| GAP/RSA                                                     |   |                               | 28.02   | % |   | (13.63 | % | )  |   | 6.73 | % |   |   | 9.12 | % |   |   | 9.12 | % |

----

|                                     |   |               | At      March 31, 2010 |                |   | At      December 31, 2009 |   |
|------------------------------------------|--------|--------------------|------------------------|---------------------|--------|---------------------------|--------|
| Changes      in Levels of Interest Rates |   | Dollar      Change |                   | Percent      Change |   | Dollar      Change        |   | Percent      Change |   |
| (Dollars      in thousands)              |   |
|                                     | +2.00  | %                  |                   | $                   | (6,197 | )                         |   |   | (11.33 | %) |   | $ | (6,584 | ) |   |   | (11.71 | %) |
|                                     | +1.00  |               |                   |                | (3,594 | )                         |   |   | (6.57 | ) |   |   | (3,329 | ) |   |   | (5.92 | ) |
|                                     | (1.00  | )                  |                   |                | 673    |                      |   |   | 1.23 |   |   |   | (281 | ) |   |   | (0.50 | ) |
|                                     | (2.00  | )                  |                   |                | 569    |                      |   |   | 1.04 |   |   |   | (394 | ) |   |   | (0.70 | ) |

| 1. | Changes      in interest rates are immediate. |
|----|-----------------------------------------------|

| 2. | It      is our policy that interest rate exposure due to a 2% interest rate rise      or fall be limited to 15% of our annual net interest income, as forecasted      by the simulation model. As demonstrated by the table above, our interest      rate risk exposure was within this policy at March 31,    2010. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.1   | Agreement      by and between Los Alamos National Bank and the Comptroller of the      Currency (incorporated by reference to Exhibit 99.1 to the Company's Form      8-K filed on February 1, 2010) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                 |
| 31.1   | Certification      of Chief Executive Officer Pursuant to Rule      13a-14(a)/15d-14(a)                                                                                                              |

| 31.2 | Certification      of Chief Financial Officer Pursuant to Rule      13a-14(a)/15d-14(a) |
|------|-----------------------------------------------------------------------------------------|

| 32.1 | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    | TRINITY      CAPITAL CORPORATION |
|-------------------------|----------------------------------|
|                    |                             |
| Date:      May 10, 2010 | By:                              | /s/      WILLIAM C. ENLOE |
|                    |                             | William      C. Enloe |
|                    |                             | President      and Chief Executive Officer |
|                    |                             |   |
| Date:      May 10, 2010 | By:                              | /s/      DANIEL R. BARTHOLOMEW |
|                    |                             | Daniel      R. Bartholomew |
|                    |                             | Chief      Financial Officer |

----